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FTX's lawyers, representing the defunct cryptocurrency exchange formerly led by Sam Bankman-Fried, have filed a lawsuit against the ex-compliance officer of the company. The legal action claims that the compliance officer illicitly compensated individuals with insider knowledge who served as witnesses to the alleged criminal actions of FTX's executives.
In the complaint submitted on Tuesday, it is alleged that Daniel Friedberg played the role of a "fixer" who made substantial payments, referred to as "exorbitant hush money," to potential whistleblowers who posed a threat to exposing the purported embezzlement of user funds by the exchange. The lawsuit lists a total of 11 charges against him, encompassing legal malpractice, breach of fiduciary duty, corporate waste, and multiple instances of fraudulent transfers.
"Friedberg had a duty to place the interests of Alameda, FTX…above the interests of himself and the other FTX insiders who were indiscriminately siphoning funds from those entities," FTX lawyers wrote in the complaint.
They added, "Friedberg breached that duty by enabling the raiding of these entities of billions of dollars for his own benefit and the benefit of Bankman-Fried and the other FTX insiders."
Friedberg held dual roles as the chief compliance officer for FTX's U.S. division and as the general counsel for Alameda Research, its sister company, from 2017 until the unfortunate collapse of both firms in November 2022.
The complaint omits the specific amount of money paid by FTX executives to maintain silence among insiders.
The company's legal team is actively pursuing the recovery of payments, including interest, made to Friedberg as part of his $300,000 salary from both FTX.US and Alameda. Additionally, they aim to reclaim his $1.4 million signing bonus and the equity stake he holds in FTX.US.
Furthermore, they have made a formal request for the restitution of 102 million Serum tokens, which hold a value exceeding $12 million, that were granted to Friedberg by FTX Group during his time in office.
